The EUR/USD pair recovered overnight as it went over the 1.12 handle despite still being in potential threat due to growing doubts in the political scenario in Italy. The League party in Italy stated that if disagreements on policies arise with the 5-Star Movement, the government will collapse, and elections will have to be held. La Repubblica reported that Italian elections could take place on the 23rd of October. The pair is hinting at increasing selling bias at higher levels as it continues to fail in going steadily over the 1.12 mark as well as its inability to get closer to the 100-day EMA barrier. On Thursday, the EUR/USD declined at first to a lower 1.12 handle after a demand for the US dollar. This resulted in the Italian-German 10-year yield gap to 211bps.
 
In addition, the GBP/USD saw small changes below 200-hour EMA, being traded close to the 1.2142 handle. The 23.6% Fibonacci retracement may push the pair to 1.2185/90. 

The Chinese Yuan lost value again as the trade war between the Asian country and the U.S. continues. It was reported that the licences allowing firms to trade with Huawei were delayed. Risk-aversion led the USD/JPY pair to drop to the 105.75 mark.

After Reserve Bank of Australia (RBA) Governor Lowe’s comments, the Aussie remained steady over the 0.68 mark.